Integration in the european electricity market: a machine learning-based convergence analysis for the central western europe region

Abstract

The European electricity market is immersed in an integration process that requires a fundamental transformation. In this process, Flow-Based Market Coupling, which was employed for the first time in the Central Western Europe electricity market in 2015 as a means to manage cross-border capacity allocation, is a crucial cornerstone. The novelty of this paper lies in the analysis of the price convergence or congestion across the Central Western Europe region since the Flow-Based Market Coupling was implemented. We propose using random forests to build learning models that are trained and tested with features from connected markets of this region during 2016 and 2017. These machine learning models are used for mining knowledge about our target variable, price equalization. To search for robust predictive patterns that decision-makers can use to understand congestion situations, we have tested different combinations of learning schemes, several estimators and different model parameters. The results of all implemented models are robust and reveal that promoting renewable energy can contradict the integration of the electricity market if the grid network and, in particular, the transmission lines are not adapted to the new paradigm.